Natural Resources / SEC Rulemaking

SEC Staff Provides Welcome Guidance to Resource Extraction Issuers

As discussed in our January 10, 2024 webinar, new SEC rules require resource extraction issuers that file reports with the SEC to file a Form SD within 270 days after each fiscal year end to report their payments to the U.S. federal government and foreign governments. An issuer’s initial filing deadline in 2024 will therefore depend upon its fiscal year end, with reports from many companies already due, and others’ deadlines fast approaching. For an issuer with a December 31 fiscal year end, the Form SD will be due no later than September 26, 2024. In informal discussions, the SEC’s staff has provided our firm with welcome guidance on a number of related...

Capital Markets / Securities

The Perils of Finder’s Fees (Revisited)

Way back in 2017, one of our earliest posts discussed the legal and financial risks to both the issuer and the finder if an issuer pays a finder’s fee in connection with a sale of securities in the United States, and the person receiving the fee is not a U.S. registered broker-dealer. In many cases, this type of fee violates U.S. securities laws. However, this continues to occur from time to time, especially in deals where U.S. counsel is not consulted prior to the closing. For a brief summary of the risks of paying this type of finder’s fee, and an example of one issuer that declared bankruptcy as a result, read on....

Employment

The U.S. Federal Trade Commission Votes to Ban Non-Compete Agreements, But the Issue is Far From Settled

Early last year, the U.S. Federal Trade Commission (“FTC”) proposed a rule banning non-compete agreements nationwide. Yesterday, the FTC voted 3 to 2 in favor of adopting this rule. The FTC’s newly adopted rule bars for-profit employers from entering into new non-compete agreements with employees, including highly compensated and executive employees. Existing non-compete agreements with senior executives are still enforceable under the new rule, but employers must, by the rule’s effective date, notify all other employees with non-compete agreements that those agreements are unenforceable. The rule defines a “senior executive” as a worker who was in a policy-making position and earns at least $151,164 per year. The rule does not apply to agreements...

Employment

Don’t Let a Tight Labor Market Get Your Guard Down

In wrongful termination cases in the U.S., the primary source of liability for employers is an employee’s alleged lost wages. Under U.S. law, an employee who is terminated for a discriminatory or a retaliatory reason is entitled to recover the amount of wages the employee would have earned had the employee not been wrongfully terminated. In a normal labor market, an employee might be able to argue that it will take him or her six months or even a year to find a new job, and the employer, therefore, should pay the employee six months’ to a year’s worth of lost wages. In a tight labor market, however, it is much harder for...

Mining-Chambers-Global

General / Natural Resources

Dorsey’s Mining Practice Group and Attorneys Recognized in Chambers Global 2024

Dorsey’s Mining & Metals practice area and three mining partners, the most lawyers of any U.S. law firm, received a Band 1 recognition by Chambers and Partners in its Chambers Global 2024. The recognized attorneys from Dorsey’s Canada Cross-Border practice group include Kimberley Anderson, Chris Doerksen and Wells Parker – just in time for the Prospectors & Developers Association of Canada (PDAC) Convention! The Chambers Global Guide ranks the top lawyers and law firms in over 200 jurisdictions across the world. Each ranking is based on Chambers’ in-depth research conducted by its dedicated and experienced team of researchers. It annually collects hundreds of thousands of responses from clients. Learn more about Dorsey’s Mining practice...

Benefits / Tax

The Special Timing Rule for Taxation of Nonqualified Deferred Compensation

For an employee who is a U.S. taxpayer, both the employer and the employee are liable for a portion of Social Security taxes and Medicare taxes (collectively referred to as “FICA” taxes) on the employee’s compensation. Employers are liable for withholding and remitting both the employer and the employee portions of FICA taxes, which typically occurs at the time the compensation is received by the employee, which his known as the “General Timing Rule.” However, when dealing with awards of nonqualified deferred compensation (“NQDC”) to U.S. taxpayers, a Special Timing Rule (outlined in Treas. Reg. §31.3121(v)(2)-1) may apply.  Under the Special Timing Rule, FICA taxes are owed when the employee becomes vested in...

Corporate / SEC Rulemaking

Canadian CPCs, SPACs, and Shells Should Be Careful to Avoid U.S. Investment Company Status

On January 24, 2024, the SEC issued new guidance on when a special purpose acquisition company (SPAC) may run afoul of the U.S. Investment Company Act (the Act).  While this guidance was directed at SPACs that register or file reports with the SEC, it is also instructive for other types of shell companies, including Canadian capital pool companies, SPACs, and similar shell companies that do not file reports with the SEC. Why Care About the U.S. Investment Company Act? If a Canadian issuer is deemed to be an investment company that has failed to register under the Act, it is prohibited from engaging in any business in the U.S. or offering or selling...

Capital Markets / SEC Rulemaking / Securities

The SEC Amends Policy on Economic Projections, and Issues Final Rules and Additional Guidance for SPACs and Shell Companies

As discussed in our eUpdate published today, the SEC on January 24, 2024 adopted final rules amending the disclosure and registration requirements applicable to special purpose acquisition companies (SPACs) and shell companies that register or file reports with the SEC. These amendments impose significant new requirements on SPAC IPOs, as well as de-SPAC and similar transactions for SEC reporting shell companies. The new SEC rules do not apply to Canadian capital pool companies, SPACs, or shell companies unless they register or file reports with the SEC. As part of the final rule package, the SEC also amended its guidance for all SEC reporting companies on how to make economic projections in SEC filings,...

Corporate / Tax

The Corporate Transparency Act: Are You Ready?

On January 1, 2024, new direct reporting requirements to the Financial Crimes Enforcement Network (“FinCEN”), a bureau of the United States Department of the Treasury, became effective – known as the Corporate Transparency Act (the “CTA”). Who must file? The CTA, and the regulations promulgated thereunder, apply to corporations, limited liability companies, limited partnerships and similar legal entities either formed in the United States (a “Domestic Reporting Company”) or formed outside the United States but registered to do business in the United States (a “Foreign Reporting Company”). Such entities must identify their natural person beneficial owners and “company applicants” (i.e. the person(s) responsible for the formation or registration of the entity), and disclose...

Natural Resources

Interagency Working Group on Mining Laws, Regulations, and Permitting Release Final Report on Proposed U.S. Mining Reforms on Public Lands

In the Fall of 2023, the Interagency Working Group on Mining Laws, Regulations, and Permitting (“IWG”) released its final report containing recommendations to reform how mining is conducted on public lands (the “Final Report”). The IWG was formed to convene experts across various agencies and receive input from the public in order to assess the adequacy of the existing regulatory scheme governing domestic hardrock mining, and to determine whether changes to that scheme were necessary to satisfy the goals set forth in the E.O. 14017 100-Day reviews. 87 Fed. Reg. 18811 (Mar. 31, 2022). The Final Report included a range of recommendations, including those which would require legislative action by Congress, those which...